A second round of stimulus checks could soon land in the bank accounts of millions of Americans after President Donald Trump signed a $900 billion economic aid package on Dec. 27. to be.
On Dec. 28, the U.S. House of Representatives voted to pass a bill to increase the stimulus checks from $600 to $2,000, with the bill getting the needed two-thirds majority of the members who voted in the house.
But the future of the effort looks bleak as Senate Majority Leader Mitch McConnell blocked attempts to vote on the House-approved $2,000 stimulus check — but revived the higher payments in a new bill that would put other items on the line. Trump’s wish list, including the repeal of Section 230, which protects social media companies from lawsuits.
McConnell rejected another push on the Senate on Dec. 31 to pass a bill that would increase checks for coronavirus aid given to Americans from $600 to $2,000, calling the bill “socialism for rich people.”
Sure, millions of Americans could use bigger checks. Nearly 6 in 10 consumers said they suffered a financial setback due to the pandemic at the end of November, according to a study by TransUnion, which also found 40% of those households said they had been waiting for the prospect of a new stimulus check to give them to help pay their bills.
At this point, it’s highly likely that people will still receive $600 checks, according to Wall Street analysts.
“In our view, the $2k cash surcharge is unlikely to make it to the Republican Senate, given the tense fiscal conservatism in the United States. [Republican] caucus,” Benjamin Salisbury and Hunter Hammond of Heights Securities said in a Dec. 29 research note. “We still expect eligible recipients to receive $600, not $2,000.”
Still, the odds of hitting the $2,000 checks have increased, but they remain slim, Hammond said in a Dec. 28 research paper: “In total, we allocate a 30% chance (versus 10%) of an account increasing direct payments. up to $2,000 will be signed this week,” Hammond wrote.
It would be the second time lawmakers have attempted to raise checks to $2,000 per person, following a Dec. 24 vote in the House during a pro forma session. That attempt was blocked by House Republicans.
Still 385 billion dollars needed
House Speaker Nancy Pelosi has urged Republicans to back the bigger checks. The GOP has opposed larger checks because of their cost, which Heights Securities estimates would be $530 billion, or about $385 billion more than what Congress approved with the $600 checks.
“The President must immediately call on Congressional Republicans to end their obstruction and join him and the Democrats in support of our stand-alone legislation to increase direct payment checks to $2,000, which will be taken to the floor tomorrow,” Pelosi tweeted on Dec. 28. .
The $600 checks requested in the latest aid package would represent half of the $1,200 sent to most adults in the first round of stimulus checks. Critics had said the aid would be helpful, but not enough to save families who have sincethe economy shut down last March, causing a spike in unemployment.
What about the timing of the checks?
Before Trump’s backlash, Treasury Secretary Steven Mnuchin had predicted on Dec. 21 that Americans could receive the money as early as the week of Dec. 28.
Despite the president’s delay in signing the bill, Mnuchin tweeted on Dec. 29 that the stimulus checks could arrive in bank accounts “as early as tonight.”
Mnuchin said paper checks will be mailed out Dec. 30 and people will be able to check their payment status on the IRS’s “Get My Payment” portal later this week. He did not specify how many checks will be distributed initially.
As of Jan. 1, the IRS site says the “Get My Payment” portal is not currently open, but it “continues to monitor and prepare for new legislation regarding economic impact payments,” the term the IRS uses. used for incentive checks.
Who will get the $600 checks?
The checks would account for half the amount paid out to most American households in the spring, when the Coronavirus Aid, Relief and Economic Security Act (or CARES Act) allowed checks of $1,200 for eligible adults.
However, under the bill passed by Congress this month, a group of people would receive more money in the second round of stimulus checks than the first: dependent children, who would receive the same $600 checks as adults, compared to the $500 checks that children receive through the CARES law in the spring.
Singles earning up to $75,000 receive $600, while married couples earning up to $150,000 receive $1,200.
The second round of checks would have the same type of income reduction as in the CARES Act, cutting incentive checks for income above $75,000 per single person or $150,000 per married couple.
According to the House Appropriations committee, the amount of payments individuals receive would be reduced by $5 for every $100 in income earned above these thresholds. That’s similar to the CARES Act, but fewer higher-income taxpayers would qualify for the checks under this formula compared to the earlier bill.
The second stimulus checks would be completely abolished for singles earning more than $87,000 or married couples earning more than $174,000 — compared to the phase-out of the CARES law for singles earning more than $99,000 and couples earning more than $174,000. earn 198,000.
To check how much you could receive, go to Omni Calculator’s second stimulus calculator for an estimate.
$600 for each “dependent” child
Aside from the smaller adult incentives, the other big change under the bill passed by Congress is the amount provided for dependent children: $600 for each child, up from $500 in the CARES bill.
However, the bill states that the $600 would be spent on each dependent child under the age of 17, meaning adults who are considered dependents anyway — such as college students and older high school students —.
Adult dependents, such as seniors who are claimed as dependents on their adult children’s tax returns, are also not eligible for the checks. Excluding students and other adult dependents was a point of contention during the first round of audits, with some families arguing that older dependents should also be eligible for the payments.
A family of two parents with two dependent children could receive up to $2,400 under the provision, lawmakers said.
“Mixed Status” Households
Couples with awould also qualify for the checks, a provision that has retroactive effect to the CARES Act, the summary said.
This is important to many families because the first round of stimulus checks went only to U.S. citizens or immigrants with alien residency status, otherwise known as a green card. Legal immigrants without a green card, as well as undocumented immigrants, were excluded — and U.S. citizens married to immigrants without a green card were also excluded, as were their children, even if the young dependents are citizens.
Refusing checks from US citizens because of their marital or parental relationship with an immigrantearlier this year over what plaintiffs claimed was an unconstitutional action.
What about Social Security recipients?
A failure in the first incentive payments was afor Social Security recipients, as well as recipients of supplemental security income, beneficiaries of the Railroad Retirement Board, and beneficiaries of the Veterans Administration. Because some of those recipients fail to file tax returns — which the IRS relied on to hand out the earliest incentive payments — millions of them waited weeks or months to get their checks.
But the new bill would ensure that those recipients would automatically receive the $600 checks, according to New Hampshire Senator Maggie Hassan, who was working on a bipartisan incentive bill that became the framework for the latest negotiations.
“I am extremely pleased that the final text of the aid package includes my bipartisan bill to ensure that recipients of Social Security, Supplemental Income, and certain VA benefits will automatically receive these payments,” Hassan said in an email to CBS MoneyWatch. .
That means millions of Social Security, SSI, VA and railroad pensioners aren’t at risk of missing out on payments, she added.